Principal sentenced for theft from school

Her boyfriend, Del. Kevin Kelly, tried unsuccessfully to intervene

Del. Kevin Kelly tried to help his ex-girlfriend last year when she fell under suspicion of stealing thousands of dollars from her school.

The Allegany County Democrat confronted the county Board of Education about theft allegations he called bunk. He assembled a trove of documents about the case, capped with his own, 130-page treatise on why Diane L. McFarland, an elementary school principal in Western Maryland for 17 years, was innocent. And in his letter to a judge, the delegate called McFarland a "victim."

But the strategy backfired yesterday, according to her trial lawyer who tried to explain how what a federal judge called a "garden-variety embezzlement" mushroomed into a year in prison for McFarland.

FOR THE RECORD - An article in yesterday's Maryland section mislabeled the profession of the person accused of theft by former Western Maryland principal Diane L. McFarland, who herself was convicted of theft in federal court. The target of her accusation was an employee with the Success For All Foundation, according to prosecutors.The Sun regrets the error.

"I don't think he understood the negative influence he was having," defense attorney Fred Warren Bennett said upon leaving U.S. District Court in Baltimore after the three-hour sentencing hearing yesterday. Bennett said that if an independent lawyer had advised McFarland from the beginning, the outcome would have likely been probation before judgment.

Instead, Judge Richard D. Bennett yesterday called McFarland, 52, of Frostburg, a liar and disgrace to her "noble profession." Though the judge praised her community service as exemplary, he nevertheless sentenced her to 12 months and one day in prison, followed by six months of home detention and three years of supervised release.

The judge explained that he came from a family of teachers and likely would have become one had he not gone to law school. So he knew her work to be honorable and her crime to be "a manifest abuse of trust" - expressing anger that McFarland testified at her trial and did not tell the truth about paying for school supplies in cash.

He also berated her for misleading investigators into thinking that the theft might have been committed by a janitor, who was investigated and later cleared by law enforcement agents.

Before pronouncing sentence, Judge Bennett reviewed 40 letters of support - including three from members of the General Assembly - and heard from six witnesses who testified about McFarland's decades of public service, years of voluntarism and the parental role she plays for her boyfriend's teenage daughter.

"I'm trying to tell the judge that I'm a good judge of character," said 86-year-old John Kelly, the delegate's father and a former educator who had known McFarland since birth. "So when I say that she has good character, I mean it."

A federal jury in June found McFarland guilty of theft from a program receiving federal funds, wire fraud and mail fraud. Saddled with crushing credit card debt, McFarland faked travel receipts and forged invoices for schoolbooks she never bought in an effort to line her own pockets, according to evidence at trial. An internal audit first discovered discrepancies in her expense reports at Cash Valley Elementary School in July 2004.

The case could have fallen under the jurisdiction of federal investigators because McFarland was accused of falsifying invoices to receive reimbursement from a federally funded education program. But Assistant U.S. Attorney Michael J. Leotta revealed yesterday that there was another reason the low-level theft became a federal case.

Worried about the influence of Kelly, who was rumored to be up for a state judgeship, Allegany County authorities asked for federal agents to take over the case, according to Leotta. Kelly rejected that account yesterday in an interview after the hearing.

McFarland was charged in December with stealing more than $18,000 from her school, taking funds intended for classroom books and travel reimbursement to teachers who attended conferences.

At trial, McFarland's attorney argued that she never knowingly stole anything. She took the stand in her own defense and testified that she mailed $10,000 in cash to pay for school supplies. Judge Bennett harshly rejected that explanation yesterday, saying both he and jurors found the explanation too incredible to believe.